Streaming Media Europe Keynote #3: Disney's Anytime, Anywhere Strategy

Disney has a very special brand, known the world over, and a strategic vision to match: special, fun entertainment with heart.

"Special means storytelling, innovation and quality," said Myles MacBean, Vice President, Disney Online EMEA. "Fun is imagination, family, quality, magical experience, positive values and uplifting entertainment; and heart is community, optimism and decency."

"It's about taking special stories and placing them in magical worlds," MacBean continued. "I think Walt Disney, if he were around today, would be leading in the creation of virtual worlds. Highly focused on strengthening the brand and staying on message."

MacBean keynoted Streaming Media Europe's second day, and his presentation dealt with the issues that a content owner of a major media company faces when it moves to a new medium. MacBean used his keynote to address the variety of mediums, the target audience, Disney's strategy and the impact on the value chain.

"Any position between raw content owner and end consumer can be disintermediated or gotten round," said MacBean, "so vertical leverage is difficult or not to be trusted. As such, embracing coopetition with partners is key, where we'll partner with some companies on one level while competing on another level. It's the new reality that many media companies are facing."

"The reason we do so is that we are focusing on our layer of the value chain," said MacBean, "and the rest of the value chain - even when it is in complete flux - provides opportunity to reach our consumers on a variety of screens. Our current model is to focus on the portals for each country, so we've built 23 European websites on a common platform, and these Disney.xx [for the two-letter domain identifiers that each country uses] all run from a server sitting in Seattle, and operators sitting in Budapest."

"Connected interacitve media, which we use instead of the more limiting term of online media, is often looked on through the tinted glasses of the previous technology," said MacBean. "Yet we recognize that it's a medium in its own right, at the intersection of production studio values, the connectivity of the PC / web and the community of users. This new medium welds them together in a way that's all about being interactive beyond just selecting what movie to watch."

Target Audience
The Disney target audience is very young, and MacBean quipped that he's not in the demographic any longer.

"The children that are our target audience have very focused and well-defined needs," said MacBean. "They want games, games, games and then - at a lower priority - they want video, music and community interaction, in much the same way that they focus on play on the playground. Plus, they want to do it all at once: multitasking for the web 2.0 generation is a very consistent norm."

Beyond just the content, though, MacBean stressed personalisation is "king, queen or princess as Disney might say," with consumers "owning" the consumption of content in "my time, my place, my way."

To address both the multi-tasking tendency and the desire for personalisation, Disney's websites are build around heavy Flash content with a drag-and-drop movement to personalise every aspect. With Flash as a mainstay, MacBean said after his speech that the move from web browser to gaming consoles (Xbox, PSP) and then on to the mobile device will benefit from the emergence of full Flash players for a variety of handset devices.

Strategy
From desktop to set-top to the handset, Disney Online has a two-fold strategy of premium-based or ad-based content. Premium includes video on demand, music and virtual worlds, with these same groupings also available in a "freemium" ad-based model, including ad-supported content as the "on ramp"

Disney Online also does upsells for games and movies and is looking at micropayments in a nod to new payment models. MacBean focused on an interactive game, Club Penguin, as one of the best freemium example, which he labeled as a very healthy going concern.

"Club Penguin has 20 million global players," said MacBean, and the game is live in the language of English, French, Portuguese and Spanish. In the English-language game, many Portuguese players got together, met in a single room and created an image in the shape of a Brasilian flag. They took a snapshot of it and then sent it to Club Penguin, requesting a version of the game in their own language."

When asked about the challenge of children not having credit cards to move from "freemium" to premium content, MacBean said Disney has not found this to be an issue, based on the way its internal policies focus on discussing these types of issues with parent.

"We are very careful about being seen as an exploiter of the children," said MacBean. "Our internal policies are very strict when it comes to selecting sponsors as well as making sure the registration process talks to the parent not to the child. Our internal business policies are stronger than COPA, a US-only law, as we're driven by our vision statement. For instance, for Club Penguin, we have strong filters but also real moderators that address issues while remaining in character. Beyond just words that are blocked, though, we look for usage spikes on particular words to see if there's been a change in word meanings."

Impact. In conclusion, MacBean talked about the impact of this new medium on the content owner, starting off with a recent quote from Robert Iger, Disney's CEO: "Are we better off moving content faster and cheaper than if they steal it and we get nothing?"

"Disney in a unique position to flourish," said MacBean, "and we're creating a unique consumer destination. We will work with others to put content in locations where our customers want it, but we want to encourage these same customers to come to our unique destination. Syndication is a very careful balancing act, and we've moved to a few syndication sites, including iTunes, but we think the impact is best exemplified through the example of our sister company, ABC Networks, where the ABC.com player is syndicated."

"Alternatively for partner sites, there is a "Disney zone" on these sites," said Macbean, "but the crown jewels will always be held at Disney.xx"

Disney is also working to converge its thinking around the interactive and converged screens model.

"We'll see public roll-out of those changes over the next year," said MacBean as we integrate our approach to Disney advertisers, so that they can pick a franchise—say Hannah Montana—across all screens, rather than just picking a single medium. I think we're getting our head around it, but we don't see any one screen as the Nirvana, so we play with all viable business models."

Along these lines, asked about smaller markets by an attendee from Greece, MacBean said one of the changes is adding a senior executive to deal with smaller markets.

"We use Disney Channel, for instance in Greece, but will probably refresh in 2010 to add a second piece to the portal," said MacBean in an interview after they keynote. "We use franchises for characters and have the modular ability on the presentation layer to add in a portfolio site (microsite) for a franchise that is localized for a particular market."